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Motivating employees begins with recognizing that to do their best work, people must be in an environment that meets their basic emotional drives to acquire, bond, comprehend, and defend. So say Nohria and Groysberg, of Harvard Business School, and Lee, of the Center for Research on Corporate Performance. Using the results of surveys they conducted with employees at a wide range of Fortune 500 and other companies, they developed a model for how to increase workplace motivation dramatically. The authors identify the organizational levers that companies and frontline managers have at their disposal as they try to meet workers' deep needs. Reward systems that truly value good performance fulfill the drive to acquire. The drive to bond is best met by a culture that promotes collaboration and openness. Jobs that are designed to be meaningful and challenging meet the need to comprehend. Processes for performance management and resource allocation that are fair, trustworthy, and transparent address the drive to defend. Equipped with real-world company examples, the authors articulate how to apply these levers in productive ways. That application should not be selective, they argue, because a holistic approach gets you more than a piecemeal one. By using all four levers simultaneously, and thereby tackling all four drives, organizations can improve motivation levels by leaps and bounds. For example, a company that falls in the 50th percentile on employee motivation improves only to the 56th by boosting performance on one drive, but way up to the 88th percentile by doing better on all four drives. That's a powerful gain in competitive advantage that any business would relish.

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This article includes a one-page preview that quickly summarizes the key ideas and provides an overview of how the concepts work in practice along with suggestions for further reading.

Today's fast-paced economy demands that businesses change or die. But few companies manage corporate transformations as well as they would like. The brutal fact is that about 70% of all change initiatives fail. In this article, authors Michael Beer and Nitin Nohria describe two archetypes--or theories--of corporate transformation that may help executives crack the code of change. Theory E is change based on economic value: shareholder value is the only legitimate measure of success, and change often involves heavy use of economic incentives, layoffs, downsizing, and restructuring. Theory O is change based on organizational capability: the goal is to build and strengthen corporate culture. Most companies focus purely on one theory or the other, or haphazardly use a mix of both, the authors say. Combining E and O is directionally correct, they contend, but it requires a careful, conscious integration plan. Beer and Nohria present the examples of two companies, Scott Paper and Champion International, that used a purely E or purely O strategy to create change--and met with limited levels of success. They contrast those corporate transformations with that of UK-based retailer ASDA, which has successfully embraced the paradox between the opposing theories of change and integrated E and O. The lesson from ASDA? To thrive and adapt in the new economy, companies must make sure the E and O theories of business change are in sync at their own organizations.

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To grasp two contrasting approaches to change and learn how to balance them to effect successful change.

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1990 Business Week named Appex Corp. the fastest growing high-technology company in the United States. Appex provided management information systems and intercarrier network services to cellular telephone companies. During its rapid growth, the company went through several structural changes. At first, there was essentially no structure and no control systems. The atmosphere at Appex eventually became chaotic. As the new CEO, Shikhar Ghosh realized that Appex needed some structure and bureaucracy. Once control was established, he reasoned, he could begin to break down the structure. Much of the structural change he implemented had advantages and disadvantages in terms of company culture and productivity. In 1991, Appex was acquired by EDS. Appex's challenge now was to work out its own structure in the context of its role as a division of a large, bureaucratic organization.

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The dean of Harvard Business School recalls the powerful effect that reading Harvard Business Review had on him as an undergraduate studying engineering in India. It was his first exposure to management thinking, and he witnessed HBR's impact firsthand when the company where he was interning one summer reorganized its largest plant according to the ideas in one HBR article--dramatically improving its productivity. Today the magazine, its website, and its book program help fulfill the HBS mission of educating many more business leaders around the globe, not all of whom can come to the school campus.

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A large global study examines the factors that stock analysts consider most important when issuing buy, hold, or sell recommendations. The considerations that are deemed significant vary widely from region to region.

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Innovation capabilities have long been central to U.S. competitive advantage, but the rate of innovative activity is increasing sharply in other countries. Some people see this as the greatest threat to America's economic leadership. The author is unconvinced.

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The clinical experience gained by fledgling doctors is an ideal example of how professional schools address the "knowing-doing gap." Harvard Business School is sending its entire first-year class abroad to developing markets to gain a similar kind of real-world experience.

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For teaching purposes, this is the case-only version of the HBR case study. The commentary-only version is reprint R1111Z. The complete case study and commentary is reprint R1111M.

When Ana Lobato was transferred from Streuvels Chemicals' Brazilian operations to the company's Brussels headquarters, she was eager to apply her considerable expertise in this foreign assignment and to expose her children to another culture. Her husband, Oswald, a doctor, seemed up for the adventure. But just over a year after their arrival in Brussels, Oswald is increasingly unhappy. He is not able to practice medicine in Belgium, and the research position that Ana's company helped him find is not all he hoped it would be. Anton Danois, the head of Streuvels's international mobility program, fears that Oswald's unhappiness will prompt Ana to consider moving back home to Brazil before the end of her assignment. In fact, Anton, who's been in HR only a few years, wonders about the logic of an international mobility program that is expensive, does not necessarily provide clear-cut returns, and poses problems not just for spouses but also for the employees who need to be reintegrated after their stints abroad.

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For teaching purposes, this is the commentary-only version of the HBR case study. The case-only version is reprint R1111X. The complete case study and commentary is reprint R1111M.

When Ana Lobato was transferred from Streuvels Chemicals' Brazilian operations to the company's Brussels headquarters, she was eager to apply her considerable expertise in this foreign assignment and to expose her children to another culture. Her husband, Oswald, a doctor, seemed up for the adventure. But just over a year after their arrival in Brussels, Oswald is increasingly unhappy. He is not able to practice medicine in Belgium, and the research position that Ana's company helped him find is not all he hoped it would be. Anton Danois, the head of Streuvels's international mobility program, fears that Oswald's unhappiness will prompt Ana to consider moving back home to Brazil before the end of her assignment. In fact, Anton, who's been in HR only a few years, wonders about the logic of an international mobility program that is expensive, does not necessarily provide clear-cut returns, and poses problems not just for spouses but also for the employees who need to be reintegrated after their stints abroad. Experts John Bollman and Ann Judge comment on this fictional case study.

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This HBR Case Study includes both the case and the commentary. For teaching purposes, this reprint is also available in two other versions: case study-only, reprint R1111X, and commentary-only, R1111Z.

When Ana Lobato was transferred from Streuvels Chemicals' Brazilian operations to the company's Brussels headquarters, she was eager to apply her considerable expertise in this foreign assignment and to expose her children to another culture. Her husband, Oswald, a doctor, seemed up for the adventure. But just over a year after their arrival in Brussels, Oswald is increasingly unhappy. He is not able to practice medicine in Belgium, and the research position that Ana's company helped him find is not all he hoped it would be. Anton Danois, the head of Streuvels's international mobility program, fears that Oswald's unhappiness will prompt Ana to consider moving back home to Brazil before the end of her assignment. In fact, Anton, who's been in HR only a few years, wonders about the logic of an international mobility program that is expensive, does not necessarily provide clear-cut returns, and poses problems not just for spouses but also for the employees who need to be reintegrated after their stints abroad. Experts John Bollman and Ann Judge comment on this fictional case study.

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